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Tejas Networks Ltd.

BSE: 540595 Sector: Telecom
NSE: TEJASNET ISIN Code: INE010J01012
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VOLUME 52061
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OPEN 500.90
CLOSE 497.65
VOLUME 52061
52-Week high 578.45
52-Week low 300.00
P/E
Mkt Cap.(Rs cr) 7,543
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tejas Networks Ltd. (TEJASNET) - Auditors Report

Company auditors report

To the Members of Tejas Networks Limited

Report on the audit of the Standalone financial statements

Opinion

1. We have audited the accompanying standalone financial statements of Tejas NetworksLimited ("the Company") which comprise the Balance Sheet as at March 31 2022and the Statement of Profit and Loss (including Other Comprehensive Income) the Statementof Changes in Equity and the Statement of Cash Flows for the year then ended and notes tothe financial statements including a summary of significant accounting policies and otherexplanatory information.

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2022 and total comprehensive income(comprising of loss and other comprehensive income) changes in equity and its cash flowsfor the year then ended.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the "Auditor's Responsibilities for the Audit of the FinancialStatements" section of our report. We are independent of the Company in accordancewith the Code of Ethics issued by the Institute of Chartered Accountants of India togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Emphasis of Matter

4. We draw your attention to Note 39 to the standalone financial statements whichexplains the uncertainties and the management's assessment of the financial impact(including recoverability of carrying value of assets) due to supply constraints and otherconditions related to the COVID-19 pandemic situation for which a definitive assessmentof the impact in the subsequent period is highly dependent upon circumstances as theyevolve. Our opinion is not modified in respect of the this matter.

Key Audit Matters

5. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current year. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Assessment of the carrying value of Intangible Assets (including intangibles underdevelopment)

Refer to notes 4(b) to the standalone financial statements.

The Company incurs product development costs and capitalises such expenditure to theextent it qualifies for recognition as an Intangible Asset (product development). Suchexpenditure predominantly represents internal manpower costs incurred on such developmentprojects. Up to the stage the products are ready to be put to use the Company records thequalifying expenditure as ‘intangible assets under development'. The Company testsIntangible Assets for impairment whenever events or changes in circumstances indicate thatthe carrying amount may not be recoverable. Intangible assets under development are testedfor impairment on an annual basis.

The determination of the recoverable values of intangible assets (including intangibleassets under development) for carrying out impairment assessment involves several keyassumptions including discount rates and future cash flow projections for ascertainingfuture economic benefits expected to be generated by such assets.

The Company has carried out an impairment assessment of intangible assets (includingintangibles under development) and concluded that the recoverable value is higher than thecarrying amount of such assets. Accordingly no adjustment to the carrying amount ofintangible assets (including intangibles under development) is considered necessary as atMarch 31 2022.

We considered this a key audit matter as:

a. The amounts involved were significant.

b. The review of carrying values of intangible assets including intangible assetsunder development involves significant management judgements and estimates such asexpected future economic benefits estimated profit margins and discount rates.

Our audit procedures which involved applying materiality and sampling techniquesincluded the following:

• Understanding evaluating and testing the design and operating effectiveness ofthe controls in respect of the Company's processes for assessing the recoverable values ofintangible assets (including intangibles under development).

• Testing the capital funding request forms and other documentation to ensure thatthe projects were appropriately approved by the Chief Technical Officer and FinanceController as per the delegated authority matrix.

• Obtaining an understanding of the selected capitalized projects testing timecharged to such projects by tracing back to time sheet data.

• Testing a sample of projects to ensure appropriate capitalisation of qualifyingemployee cost.

• Assessing whether sufficient economic benefits are likely to flow from theprojects to support the values capitalised.

• Analysing the reasonableness of key management assumptions and estimates used inthe impairment analysis (e.g. forecasted revenue margin percentages etc.)

• With the involvement of auditor's experts evaluating the appropriateness of theunderlying assumptions such as discount rate and assessing the methodology of impairmentworkings.

Based on our procedures performed above we noted the management's assessment of thecarrying value of intangible assets (including intangibles under development) to bereasonable.

Assessment of recoverability of Deferred Tax Assets ("DTA") on tax losses andtax credits with respect to Minimum Alternate Tax ("MAT") (Refer notes 2.149(b) and 25 to the standalone financial statements.)

The Company has recognised DTA of Rs.48.67 crores on unabsorbed depreciation andbusiness losses carried forward from the previous years (together referred to hereinafteras "tax losses"). Further the Company has also recognised DTA on tax creditswith respect to Minimum Alternate Tax (MAT) aggregating to Rs.44.14 crores.

DTA has been recognised on the basis of Company's assessment of availability of futuretaxable profit to be able to utilise such tax losses and tax credits. The recoverabilityof the DTA depends upon factors such as the projected taxable profits of business theperiod considered for such projections the rate at which those profits will be taxedperiod over which tax losses will be available for recovery and the likely outcome ofdisputes pending with the tax authorities.

The assessment of DTA is considered a key audit matter as the amounts involved arematerial to the financial statements and significant estimates and judgement are involvedin assessing the amount of DTA and also in relation to preparation of forecasts of futuretaxable profits based on the underlying business plans.

Our audit procedures which involved applying materiality and sampling techniquesincluded the following:

• Evaluating the design and testing of the operating effectiveness of Company'scontrols relating to taxation and the assessment of carrying amount of DTA relating tounabsorbed tax losses and tax credits.

• Testing the appropriateness of the amount of DTA by tracing the tax losses andthe tax credits to the income tax returns filed and assessment orders received by theCompany and evaluating the judgement made by the Company on the amounts disputed by theIncome Tax Authorities.

• Assessing the reasonableness of the period of projections used in the deferredtax asset recoverability assessment.

• Testing whether projections prepared by the Company were consistent with ourunderstanding and knowledge of current business and the general economic environment inwhich the Company operates and whether the tax losses and MAT can be utilized within therecoupment period.

• Assessing appropriateness of the assumptions used in the projections of futuretaxable profits.

• Reviewing the adequacy of disclosures made in the financial statements withregard to deferred taxes.

Based on the above procedures performed our testing did not identify any significantexceptions with respect to the reasonableness of the assumptions and estimates used by themanagement in assessing the recoverability of DTA recognised in respect of tax losses andtax credits as at year end.

Other Information

6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Board's Report but does not includethe financial statements and our auditor's report thereon. The Board's report is expectedto be made available to us after the date of this auditor's report.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

When we read the Board's report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance andtake appropriate action as applicable under the relevant laws and regulations.

Responsibilities of management and those charged with governance for the financialstatements

7. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

8. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's responsibilities for the audit of the financial statements

9. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

10. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

11. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

12. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

13. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

14. As required by the Companies (Auditor's Report) Order 2020 ("theOrder") issued by the Central Government of India in terms of Section 143(11) of theAct we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4of the Order to the extent applicable.

15. As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 from being appointed as a director in terms of Section 164(2) of theAct.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure A".

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to the best of our information and according to the explanations given tous:

i) The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 29.1 to the financialstatements;

ii) The Company has made provision as at March 31 2022 as required under theapplicable law or accounting standards for material foreseeable losses if any onderivative contracts. There are no other long-term contracts as at March 31 2022 forwhich there were material foreseeable losses.

iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended March 31 2022.

iv) (a) The management has represented that to the best of its knowledge and beliefno funds (which are material either individually or in the aggregate) have been advancedor loaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the Company to or in any other person(s) or entity(ies) includingforeign entities ("Intermediaries") with the understanding whether recorded inwriting or otherwise that the Intermediary shall whether directly or indirectly lendor invest in other persons or entities identified in any manner whatsoever by or on behalfof the Company ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries (Refer Note 37 (vii) to the financialstatements);

(b) The management has represented that to the best of its knowledge and belief nofunds (which are material either individually or in the aggregate) have been received bythe Company from any person(s) or entity(ies) including foreign entities ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries (Refer Note 37 (vii) to the financial statements);and

(c) Based on such audit procedures that we considered reasonable and appropriate in thecircumstances nothing has come to our notice that has caused us to believe that therepresentations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and (b)above contain any material misstatement.

v) The Company has not declared or paid any dividend during the year.

16. The Company has paid^ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Mohan Danivas S A
Partner
Place: Bengaluru Membership Number: 209136
Date: April 22 2022 UDIN: 22209136AHOXEJ1024

Annexure A to Independent Auditors' Report

Referred to in paragraph 15(f) of the Independent Auditor's Report of even date to themembers of Tejas Networks Limited on the standalone financial statements for the yearended March 31 2022

Report on the Internal Financial Controls with reference to Financial Statements underSection 143(3)(i) of the Act

1. We have audited the internal financial controls with reference to financialstatements of Tejas Networks Limited ("the Company") as of March 31 2022 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting("the Guidance Note") issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing deemed to be prescribedunder Section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk.

The procedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

6. A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2022 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note issued by ICAI. Also refer paragraph 4 of the main audit report onthe audit of standalone financial statements.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Mohan Danivas S A
Partner
Place: Bengaluru Membership Number: 209136
Date: April 22 2022 UDIN: 22209136AHOXEJ1024

Annexure B to Independent Auditor's Report

Referred to in paragraph 14 of the Independent Auditors' Report of even date to themembers of Tejas Networks Limited on the standalone financial statements as of and for theyear ended March 31 2022.

i. (a) (A) The Company is maintaining proper records showing full particularsincluding quantitative details and situation of Property Plant and Equipment.

(B) The Company is maintaining proper records showing full particulars of Intangibleassets.

(b) The Property Plant and Equipment are physically verified by the Managementaccording to a phased programme designed to cover all the items over a period of 3 yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. Pursuant to the programme a portion of the Property Plant andEquipment has been physically verified by the Management during the year and no materialdiscrepancies have been noticed on such verification.

(c) According to the information and explanations given to us and the records of theCompany examined by us the Company does not own any immovable properties (other thanproperties where the company is the lessee and the lease agreements are duly executed infavour of the Company) (Refer Note 4(a) to the financial statements). Therefore theprovisions of clause 3(i)(c) of the Order are not applicable to the Company

(d) The Company has chosen cost model for its Property Plant and Equipment (includingRight of Use assets) and intangible assets. Consequently the question of our commentingon whether the revaluation is based on the valuation by a Registered Valuer or specifyingthe amount of change if the change is 10% or more in the aggregate of the net carryingvalue of each class of Property Plant and Equipment (including Right of Use assets) orintangible assets does not arise.

(e) Based on the information and explanations furnished to us and as represented by themanagement no proceedings have been initiated on or are pending against the Company forholding benami property under the Prohibition of Benami Property Transactions Act 1988(as amended in 2016) (formerly the Benami Transactions (Prohibition) Act 1988 (45 of1988)) and Rules made thereunder and therefore the question of our commenting on whetherthe Company has appropriately disclosed the details in its financial statements does notarise.

ii. (a) The physical verification of inventory (excluding stocks with third parties)have been conducted at reasonable intervals by the Management during the year and in ouropinion the coverage and procedure of such verification by Management is appropriate. Inrespect of inventory lying with third parties these have substantially been confirmed bythem. The discrepancies noticed on physical verification of inventory as compared to bookrecords were not 10% or more in aggregate for each class of inventory.

(b) During the year the Company has been sanctioned working capital limits in excessof Rs.5 crores in aggregate from banks on the basis of security of current assets. TheCompany has filed quarterly returns or statements with such banks which are in agreementwith the unaudited books of account. (Also refer Note 37 (ii) to the financial statements)

iii. (a) The Company has made investments by way of inter corporate deposits in threecompanies during the year. The Company has not granted secured/ unsecured loans/advancesin nature of loans or stood guarantee or provided security to any parties. Thereforeaccordingly to this extent the reporting under clause 3 (iii) (iii)(a) (iii)(b)(iii)(c) (iii)(d) (iii)(e) and (iii)(f) of the Order are not applicable to the Company

(b) In respect of the aforesaid investments the investments made are not prejudicialto the Company's interest.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of the loans and investments made and guarantees and security provided byit.

v. The Company has not accepted any deposits or amounts which are deemed to be depositsfrom the public within the meaning of Sections 73 74 75 and 76 of the Act and the Rulesframed there under to the extent notified.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.

vii. a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingthe undisputed statutory dues including provident fund employees' state insuranceincome tax sales tax service tax duty of customs duty of excise value added taxcess goods and services tax and other material statutory dues as applicable with theappropriate authorities.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no statutory dues of service tax and goods and servicetax which have not been deposited on account of any dispute. The particulars of dues ofincome tax sales tax duty of excise and value added tax as at March 31 2022 which havenot been deposited on account of a dispute are as follows:

Name of the Statue Nature of Dues Amount (Gross) Period to which the amount relates Forum where the dispute is pending Amount paid under protest
Central Excise Act 1944 Tax interest and penalty 46.24 2002-2014 Supreme Court and CESTAT Chennai 2.38
Central Excise Act 1944 Tax interest and penalty 0.71 2012-13 CESTAT Chennai 0.20
West Bengal Value Added Tax Act 2003 Tax and interest 0.51 2014-15 West Bengal Sales Tax Appellate Revisionary Board 0.05
Customs Act 1962 Tax 0.14 2018-19 Commissioner (Appeals) Chennai 0.14

Note: The disputed dues above does not include demands received by the Company from theDeputy Commissioner of Commercial Taxes (DCCT) for Rs.5.04 crore under the KarnatakaValue Added Tax (KVAT) relating to FY 2016-17. Subsequent to the year end the Company hadfiled a writ petition with the High Court of Karnataka and the High court has disposed thematter back to the DCCT.

viii. According to the information and explanations given to us and the records of theCompany examined by us there is no income surrendered or disclosed as income during theyear in the tax assessments under the Income Tax Act 1961 that has not been recorded inthe books of account.

ix. (a) The Company does not have any loans or other borrowings from any lender.Accordingly the reporting under clause 3(ix)(a) of the Order is not applicable to theCompany

(b) According to the information and explanations given to us and on the basis of ouraudit procedures we report that the Company has not been declared Wilful Defaulter by anybank or financial institution or government or any government authority.

(c) According to the records of the Company examined by us and the information andexplanations given to us the Company has not obtained any term loans.

(d) According to the information and explanations given to us and the proceduresperformed by us and on an overall examination of the financial statements of the Companywe report that no funds raised on short-term basis have been used for long-term purposesby the Company

(e) According to the information and explanations given to us and on an overallexamination of the financial statements of the Company we report that the Company has nottaken any funds from any entity or person on account of or to meet the obligations of itssubsidiaries joint ventures and associate companies.

(f) According to the information and explanations given to us and procedures performedby us we report that the Company has not raised loans during the year on the pledge ofsecurities held in its subsidiaries joint ventures or associate companies.

x. (a) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Accordingly the reportingunder clause 3(x)(a) of the Order is not applicable to the Company.

(b) The Company has made a preferential allotment/ private placement of shares duringthe year in compliance with the requirements of Section 42 and Section 62 of the Act. Thefunds raised have been used for the purpose for which funds were raised except asdescribed below:

Nature of securities Purpose for which funds raised Total Amount Raised Amount utilized for the other purpose Un-utilized balance as at Balance sheet date Remarks
Equity shares and Series A and Series B Warrants To invest organically and inorganically in the research & development sales and marketing working capital requirements capital expenditure people and infrastructure and enhance its manufacturing and operational capabilities to cater to this large market opportunity and for other general corporate purposes. 837.50 - 576.33 None

xi. (a) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company noticed or reported duringthe year nor have we been informed of any such case by the Management.

(b) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us a report under Section 143(12)of the Act in Form ADT-4 was not filed during the year. Accordingly the reporting underclause 3(xi)(b) of the Order is not applicable to the Company.

(c) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us and as represented to us by themanagement no whistle-blower complaints have been received during the year by the CompanyAccordingly the reporting under clause 3(xi)(c) of the Order is not applicable to theCompany

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the reporting under clause 3(xii) of the Order is not applicable to the Company

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the standalone financial statements as required underIndian Accounting Standard (Ind AS) 24 "Related Party Disclosures" specifiedunder Section 133 of the Act.

xiv. (a) In our opinion and according to the information and explanation given to usthe Company has an internal audit system commensurate with the size and nature of itsbusiness.

(b) The reports of the Internal Auditor for the period under audit have been consideredby us.

xv. The Company has not entered into any non-cash transactions with its directors orpersons connected with him. Accordingly the reporting under clause 3(xv) of the Order isnot applicable to the Company

xvi. (a) The Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934. Accordingly the reporting under clause 3(xvi)(a) of theOrder is not applicable to the Company.

(b) The Company has not conducted non-banking financial / housing finance activitiesduring the year. Accordingly the reporting under clause 3(xvi)(b) of the Order is notapplicable to the Company.

(c) The Company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve Bank of India. Accordingly the reporting under clause 3(xvi)(c) ofthe Order is not applicable to the Company

(d) Based on the information and explanations provided and as represented by themanagement of the Company the Group has six CICs as part of the Group as detailed in note37(xi) to the financial statements. We have not however separately evaluated whether theinformation provided by the management is accurate and complete.

xvii. The Company has not incurred any cash losses in the financial year or in theimmediately preceding financial year.

xviii. There has been no resignation of the statutory auditors during the year andaccordingly the reporting under clause 3(xviii) is not applicable.

xix. According to the information and explanations given to us and on the basis of thefinancial ratios (Also refer Note 29.9 to the financial statements) ageing and expecteddates of realisation of financial assets and payment of financial liabilities otherinformation accompanying the financial statements our knowledge of the Board of Directorsand management plans and based on our examination of the evidence supporting theassumptions nothing has come to our attention which causes us to believe that anymaterial uncertainty exists as on the date of the audit report that Company is not capableof meeting its liabilities existing at the date of balance sheet as and when they fall duewithin a period of one year from the balance sheet date. We however state that this isnot an assurance as to the future viability of the Company We further state that ourreporting is based on the facts up to the date of the audit report and we neither give anyguarantee nor any assurance that all liabilities falling due within a period of one yearfrom the balance sheet date will get discharged by the Company as and when they fall due.

xx. As at balance sheet date the Company does not have any amount remaining unspentunder Section 135(5) of the Act. Accordingly reporting under clause 3(xx) of the Order isnot applicable. Also refer note 33 to the standalone financial statements.

xxi. The reporting under clause 3(xxi) of the Order is not applicable in respect ofaudit of Standalone Financial Statements. Accordingly no comment in respect of the saidclause has been included in this report.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Mohan Danivas S A
Partner
Place: Bengaluru Membership Number: 209136
Date: April 22 2022 UDIN: 22209136AHOXEJ1024

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